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Squandered Investments and Private Health Insurance

By Dr. Brandon Green

As we emerge from this recession there is no shortage of stories of struggle – the unemployment figures have left their mark throughout every sector of the economy and in millions of families.   But even as private sector jobs continue to increase, another source of strife stands out even for people who never lost their jobs.  Health care bills, particularly for employed folks who mistakenly thought they had reliable private insurance coverage through their work, have presented insurmountable hurdles for patients since well before this most recent downturn.  In our society that trusts the invisible hand of the market to bring value to the consumer, the fact that faithfully paid premiums result in no guarantee of coverage makes for poignant irony.  Consider the following examples as archetypes of the problems confronted by middle class Americans who thought private insurance was on their side.

 Thomas Wilkes, a 7 year-old Colorado boy with a bleeding disorder, comes from a common, white, working class family. His father, Nathan, always took for granted that the insurance pool he paid into monthly through his job would protect his family from financial ruin in the event of unforeseen health problems, but the regular clotting factor transfusions his son Thomas needs for survival quickly exhausted the beneficence of his employer’s insurance company.   The company instituted a soon-surpassed $1 million lifetime cap on young Thomas’s health care coverage and meanwhile raised premiums and reduced coverage for all of Nathan’s co-workers.  Ultimately, Thomas was saved by Colorado’s high risk pool, which now guarantees his coverage.

David Welch, a registered nurse in California nearing retirement, had planned to reduce his hours to per diem, giving up his health insurance benefits in exchange for more autonomy in his schedule.  He thought his health care savvy would make him an ideal candidate for negotiating the individual health insurance market, but late in this transition a routine health screening by his doctor revealed a small, treatable skin cancer.  Nurse Welch, following a lifetime of insurance coverage found himself uninsurable, stamped with a pre-existing condition, and resigned to wait through the remaining years until he qualified for Medicare when he could count on dependable health insurance again.

Crystal Wagner, a young woman from Georgia, was diagnosed with high grade cervical cancer at age 22 and needed surgery.  Her parents had been paying insurance premiums throughout her life that up until 3 years before this would have theoretically covered the steep medical bills that would follow.  But they got no benefit from this investment, and instead dutifully paid thousands of dollars out- of-pocket to save their daughter’s life while the insurance company paid shareholder dividends padded with two decades of the Wagners’ premiums.

Florence Corcoran, a middle class mother from Louisiana with a history of high-risk pregnancy was lucky to be insurable at all.  When she got pregnant again her obstetrician (and five other secondary physicians) rightly foresaw another tenuous late term for Florence and her baby, and ordered her to bed rest throughout her final trimester with in-home nursing to help monitor the fetus’s condition.  The insurance company denied this most essential claim and subsequent appeal, and predictably, the fetus went into distress and died while Corcoran was at home without medical support.

Critics of the Patient Protection and Affordable Care Act (PPACA) routinely decry it as a socialist take-over of health care.  There has been a take-over all right, rather a corporate coup d’état, where distant, unaccountable and unelected businessmen make life and death decisions driven by profit motives, incentivized to deny care whenever possible while raking in breathtaking paychecks subsidized by jilted consumers.   However, for each of the stories above and hundreds of thousands of similar problems, the PPACA has a remedy:  removing lifetime caps on coverage, outlawing discrimination for pre-existing conditions, allowing children to stay on parents’ insurance until age 26, and strengthening the claims appeals process in favor of the consumer.  

It is not socialism to finally insist on some return for our investment of premium dollars, and the private insurance market would be well-advised to make the best of this second chance they have been given to be responsible free-market actors.  As it stands these middlemen have yet to demonstrate that they bring any added value to the overall health care market. Certainly our system of private insurance is what most differentiates us from all other industrialized countries.  Western Europe incidentally out rank us in every major health metric as well as consumer satisfaction - 57% of Brits, 65% of the French, and 91% of Danes are satisfied with their government guarantee of health insurance.  If the US private insurance industry ran in an election today to keep their position as the nation’s health care underwriters they would lose.  Barely 40% of privately insured Americans (those that are healthy enough to maintain coverage so they may have the privilege of paying premiums) are satisfied with their coverage.  Contrast that with the 56% of Medicare beneficiaries who are very satisfied with their coverage and it’s not hard to make out the writing on the wall. 

Another election is coming, a referendum on health insurers, and, unless private industry starts accepting some correction from the people it purports to serve, headlines the morning after will read “Public option wins in a landslide.”

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